# Feds seize millions in cash, cars and art from major cigar executive



## PAMedic (May 29, 2013)

Millions of dollars in cash, sports cars, jewelry and art once belonging to an executive at Swisher International, the world's largest cigar maker, are now in the hands of federal agents, according to court documents filed by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The ATF seized the assets from Alex Goldman, the president of Royal Gold Cigars, Swisher International's premium cigar division. They accuse him of secretly selling millions of dollars' worth of cigars to two unnamed California companies without paying state excise taxes.

California collects substantial taxes on cigars, between 31 percent and 46 percent of the sales price, and requires all dealers to be licensed by the Board of Equalization.

According to the court documents, Goldman willfully took steps to avoid those taxes while running his own company House of Oxford between 2006 and 2011.

The ATF said Goldman's House of Oxford company began selling untaxed tobacco to an unnamed "Customer Number 1" in 2006. The scheme involved House of Oxford shipping untaxed cigars directly to customers of "Customer 1" within California, but billing "Customer 1" at their out-of-state office. "Customer 1's" primary customer was a wholesale tobacco business inside California, according to ATF documents, although the documents don't name the company.

MORE: Sports cars, $1M seized from major cigar executive

In 2009, House of Oxford began selling untaxed cigars to a second California tobacco distributor, according to the documents. Between 2009 and 2010, House of Oxford shipped cigars to "Customer 2" about 100 times. They avoided taxes by shipping the product to multiple home addresses associated with "Customer 2" instead of their business office.

According to ATF documents, Goldman signed a settlement agreement on April 14 admitting there was enough evidence to support the forfeiture of his property.

The ATF took in a huge haul from Goldman, including about $7 million in cash, a Ferrari, a Porsche, an Audi and 38 pieces of expensive jewelry and art, including three works by Joan Miro.

Agents also seized $5 million in funds related to a loan between House of Oxford and another major cigar company, Drew Estate. The documents don't say what the loan was for or if Drew Estates had any involvement in House of Oxfords' criminal activity.

Goldman was hired on to run Swisher's premium cigar division Royal Gold Cigars in 2013. The documents don't say if they suspect Goldman of doing anything illegal during his tenure at Swisher.

A spokesperson for the Department of Justice said she could not comment on the case because of the ongoing investigation. News10 will update the story as we learn more.
Feds seize millions in cash, cars and art from major cigar executive


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## Tobias Lutz (Feb 18, 2013)

Imagine that, Swishers aren't so sweet afterall :lol:


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## HardHeaded (Nov 6, 2013)

Well he was not too bright there. If he was dumb enough to think those ideas would work, especially with something tobacco related I say good riddance. Understanding tax law is pretty basic and fundamental to any business.

I just wonder if the seized property covers the back taxes and fines at this point.


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## PAMedic (May 29, 2013)

From what the article says: he violated State Tax law.


Why are the Feds involved?


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## jp1979 (Sep 12, 2013)

Wonder what DE's involvement is.


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## HardHeaded (Nov 6, 2013)

PAMedic said:


> From what the article says: he violated State Tax law.
> 
> Why are the Feds involved?


Its California. Maybe they just got bored with enforcing public smoking bans.

My guess would be that tobacco was involved and that at least the billing invoices for the one customer were crossing state lines.


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## TJB (Dec 10, 2012)

Ya I wonder why the Feds got involved as well. Maybe because of the crossing state lines. But maybe they are researching to have "ammo" to knock down all the big dogs if they sue in the future when they unveil their wonderful regulations.


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## Pattywaggon (May 1, 2014)

jp1979 said:


> Wonder what DE's involvement is.


As am I, wonder what is going on there???? eep:


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## jp1979 (Sep 12, 2013)

Pattywaggon said:


> As am I, wonder what is going on there???? eep:


Don't quote me on this but during the downturn in 2008 DE was on the verge of going under, if I am remembering the article I read correctly. It said they borrowed some money to keep them afloat. I wonder if this was it or if they borrowed him money.


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## Pattywaggon (May 1, 2014)

WOW never heard anything like this before, 
but I don't smoke that many drew estate cigars so I don't pay much attention to all the good/bad hype.

BUT seeing that they might have been involved with dirty money, I don't know if I feel comfortable with supporting the company
(even if they didn't get busted for anything, does not mean they where not guilty)


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## tnlawyer (Jul 17, 2013)

TJB said:


> Ya I wonder why the Feds got involved as well. Maybe because of the crossing state lines. But maybe they are researching to have "ammo" to knock down all the big dogs if they sue in the future when they unveil their wonderful regulations.


Funny how the Feds seem to be involving themselves in certain things these days while turning a complete blind eye to many pink elephants sitting around the room.


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## jp1979 (Sep 12, 2013)

Pattywaggon said:


> WOW never heard anything like this before,
> but I don't smoke that many drew estate cigars so I don't pay much attention to all the good/bad hype.
> 
> BUT seeing that they might have been involved with dirty money, I don't know if I feel comfortable with supporting the company
> (even if they didn't get busted for anything, does not mean they where not guilty)


I'm not saying they were involved, maybe the guy borrowed them his dirty money, which they probably didn't know.


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## jp1979 (Sep 12, 2013)

"For a time, that future looked in jeopardy. In September 2008, Drew Estate ran into money problems. Caught with too many cigars, too many projects, and with the world financial crisis in full bloom, the company's lenders began cutting Drew Estate's credit. "We were overproduced to the tune of two or three million units," says Drew. The bank reigned in more than $1 million worth of the company's credit, forcing Drew Estate to lay off more than 100 workers. "That was the blackest moment, other than the early days," says Drew. "We've gone through a tremendous amount of struggles," says Samel. Rumors began to swirl that the company was going on the auction block. "We worked through that with help from some of our dearest suppliers," says Drew. "Friends who lent us some money." He says the financial scare taught him to be more disciplined with his business moves, with better communication between accounting, production and marketing."

From the CA article that I read.


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## Pattywaggon (May 1, 2014)

jp1979 said:


> "For a time, that future looked in jeopardy. In September 2008, Drew Estate ran into money problems. Caught with too many cigars, too many projects, and with the world financial crisis in full bloom, the company's lenders began cutting Drew Estate's credit. "We were overproduced to the tune of two or three million units," says Drew. The bank reigned in more than $1 million worth of the company's credit, forcing Drew Estate to lay off more than 100 workers. "That was the blackest moment, other than the early days," says Drew. "We've gone through a tremendous amount of struggles," says Samel. Rumors began to swirl that the company was going on the auction block. "We worked through that with help from some of our dearest suppliers," says Drew. "Friends who lent us some money." He says the financial scare taught him to be more disciplined with his business moves, with better communication between accounting, production and marketing."
> 
> From the CA article that I read.


Ah now i see, but seems like they had good intentions and didn't know the "borrowed" money was dirty.
so i guess they are alright :gossip:


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## jp1979 (Sep 12, 2013)

Pattywaggon said:


> Ah now i see, but seems like they had good intentions and didn't know the "borrowed" money was dirty.
> so i guess they are alright :gossip:


I am 100% speculating at this point. Read the OP and then remembered reading that article in CA


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## Pattywaggon (May 1, 2014)

jp1979 said:


> I am 100% speculating at this point. Read the OP and then remembered reading that article in CA


Hey, i'm not 100% sure on any of the cigar company hype but it is fun to join in :fear: haha


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## Gheldan (Mar 22, 2014)

California is basically the polar opposite of Texas. We are over regulated and they are under regulated. We have stupid things like this happen, while Texas has Chemical factories blow up because ... well you get the idea.

I'm sure somewhere out there there is a state that is regulated just right, I wouldn't mind moving there.


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## tmoran (Mar 25, 2014)

Pattywaggon said:


> WOW never heard anything like this before,
> but I don't smoke that many drew estate cigars so I don't pay much attention to all the good/bad hype.
> 
> BUT seeing that they might have been involved with dirty money, I don't know if I feel comfortable with supporting the company
> (even if they didn't get busted for anything, does not mean they where not guilty)


I don't mean to single you out here, but the old saying about glass houses and stones comes to mind here. Unless you have never bought cigars online, or dutifully made sure to send your tax check to the state, you have participated in pretty much the same thing, only on a much smaller scale. I'm not trying to defend anybody here, but far be it from me to pass judgment on somebody for avoiding tobacco taxes.

That being said, I always make sure to file my proper state sales and tobacco tax for all my online purchases :biglaugh:


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## jp1979 (Sep 12, 2013)

tmoran said:


> I don't mean to single you out here, but the old saying about glass houses and stones comes to mind here. Unless you have never bought cigars online, or dutifully made sure to send your tax check to the state, you have participated in pretty much the same thing, only on a much smaller scale. I'm not trying to defend anybody here, but far be it from me to pass judgment on somebody for avoiding tobacco taxes.
> 
> That being said, I always make sure to file my proper state sales and tobacco tax for all my online purchases :biglaugh:


This was at least 8 million dollars worth of taxes on a wholesale level, little different than buying 20 boxes of cigars online.


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## Laynard (Oct 10, 2013)

tmoran said:


> I don't mean to single you out here, but the old saying about glass houses and stones comes to mind here. Unless you have never bought cigars online, or dutifully made sure to send your tax check to the state, you have participated in pretty much the same thing, only on a much smaller scale. I'm not trying to defend anybody here, but far be it from me to pass judgment on somebody for avoiding tobacco taxes.
> 
> That being said, I always make sure to file my proper state sales and tobacco tax for all my online purchases :biglaugh:


I pay my (online) taxes too...I swear! :lie:


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## Tobias Lutz (Feb 18, 2013)

Gheldan said:


> I'm sure somewhere out there there is a state that is regulated just right, I wouldn't mind moving there.


Keep looking, Goldilocks! We all have our screwed up parts to go along with our assets.


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## tmoran (Mar 25, 2014)

jp1979 said:


> This was at least 8 million dollars worth of taxes on a wholesale level, little different than buying 20 boxes of cigars online.


I agree that the difference in scale is huge, but if you make a statement that you will not purchase a product from a company that avoids tobacco taxes, it would be hypocritical to buy anything online without sending in the tax check.

Like I said, I'm not trying to pass judgment on anyone here. I just happen to disagree most of the time when somebody makes a blanket statement that they refuse to buy from company X because of something so trivial in the grand scheme of things. If the company had 5 year olds chained to benches for 18 hours a day rolling cigars, than sure, that would effect my buying decisions. I guess everybody has their own threshold.


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## jp1979 (Sep 12, 2013)

tmoran said:


> I agree that the difference in scale is huge, but if you make a statement that you will not purchase a product from a company that avoids tobacco taxes, it would be hypocritical to buy anything online without sending in the tax check.
> 
> Like I said, I'm not trying to pass judgment on anyone here. I just happen to disagree most of the time when somebody makes a blanket statement that they refuse to buy from company X because of something so trivial in the grand scheme of things. If the company had 5 year olds chained to benches for 18 hours a day rolling cigars, than sure, that would effect my buying decisions. I guess everybody has their own threshold.


I don't think he was talking about not buying from them for avoiding taxes. I think he was suggesting that he wouldn't buy from them for knowingly taking dirty money, if that was the case.


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## tmoran (Mar 25, 2014)

jp1979 said:


> I don't think he was talking about not buying from them for avoiding taxes. I think he was suggesting that he wouldn't buy from them for knowingly taking dirty money, if that was the case.


I think there is a difference in opinion of what constitutes dirty money, but that is fine. There is nothing wrong with agreeing to disagree.


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## theboss928 (Mar 15, 2014)

Swisher International and Drew Estate are partners and they collaberated in making the Drew Estate Nirvana. Is it possible that's the reason Drew Estates name came up.


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## TonyBrooklyn (Jan 28, 2010)

PAMedic said:


> From what the article says: he violated State Tax law.
> 
> Why are the Feds involved?


I am sure by the time the dust settles they will wet their beaks as well.


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## Blue Raccoon (Mar 13, 2011)

it's always the tax man that get's the crooks..


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## HardHeaded (Nov 6, 2013)

The more I think about this the more I think it was bad taste to mention DE at all in the article by name. It was just a loan between companies. 

Its especially bad taste when the other guilty parties, Customer 1 and Customer 2, are not named at all.

Anyone else smell fish on this one?


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## ghe-cl (Apr 9, 2005)

I can't understand why anyone would be surprised that ATF was involved. Simply put, ATF is involved in just about anything involving the sale of tobacco and has been, basically, since the agency's forerunner was created during the Civil War. Where, how and what charges are filed isn't really an issue.


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## rraming (Nov 4, 2013)

Why are the Feds involved?
I assume shipping method, crossing state lines etc.. Like if you mail something you can be charged with a felony. Lots of federal laws could have been violated, I assume it would be something along those lines.


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## harned (Jun 11, 2013)

Just another individual caught cheating on taxes. It's not like our politicians don't get caught doing it all the time. It'll just be a bigger deal since the gov isn't really tobacco friendly.


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## Tobias Lutz (Feb 18, 2013)

rraming said:


> Why are the Feds involved?
> I assume shipping method, crossing state lines etc.. Like if you mail something you can be charged with a felony. Lots of federal laws could have been violated, I assume it would be something along those lines.


The Department of Alcohol, *TOBACCO*, and firearms.


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## Fat Cobra (Oct 13, 2013)

Interstate commerce law is why feds can and do get involved.


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## Damselnotindistress (Aug 7, 2011)

I feel really sick for the poor guy. Just think of all those BANKERS and WALL STREET EXECUTIVES who've had NOTHING taken from THEM. And they actually HURT people :sb


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## PlatinumRespect (Aug 16, 2013)

*Puts tin foil hat on*

Does anyone else find it funny that this whole thing reared its head right now, when premium cigar legislation is being heavily looked at for reform?


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## PAMedic (May 29, 2013)

PlatinumRespect said:


> *Puts tin foil hat on*
> 
> Does anyone else find it funny that this whole thing reared its head right now, when premium cigar legislation is being heavily looked at for reform?


And here we have the truth.


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## AuTechCoM (Jan 13, 2014)

PlatinumRespect said:


> *Puts tin foil hat on*
> 
> Does anyone else find it funny that this whole thing reared its head right now, when premium cigar legislation is being heavily looked at for reform?


Like this?


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## nice_ash (Jan 4, 2014)

Wait... we are supposed to pay tax on cigars purchased online? Call me naive But I just assumed the company's that sell and ship out have taken all of that into account before selling these things.


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## topshelfcigars (May 5, 2007)

Does anyone think there were kickbacks (from Customer 1 and Customer 2) paid to HofOx (Goldman's company) LOL???

I know there can be money made in this business (legitimately), but Millions of dollars, artwork and exotic cars for someone that most customers never even heard of?

Who are Customer 1 and Customer 2????


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## StereotypicalCubanDude (May 1, 2014)

Just heard this guy being interviewed on the sg podcast. Never heard of him or his cigar line with swisher. Surprised to learn dude was living so lavishly.


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## ChiGars (Dec 11, 2013)

Wow that's a black eye for the cigar industry.


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## Tobias Lutz (Feb 18, 2013)

nice_ash said:


> Wait... we are supposed to pay tax on cigars purchased online? Call me naive But I just assumed the company's that sell and ship out have taken all of that into account before selling these things.


You're supposed to pay sales tax on ANY online purchases that involve interstate commerce. You are given the opportunity to declare them when filing your state income taxes each year.


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